Obamacare: California proving new health care law can work

It's almost become a cliché: If the new health care law makes it here, it can make it anywhere.

As thousands of California procrastinators try to beat Monday's midnight deadline to apply for a health care plan, they'll be joining more than 1 million others in the Bellwether State who already have enrolled through California's health insurance exchange. And another 2 million have been determined eligible for Medi-Cal, the state's program for the poor.

With exchange sign-ups in the state exceeding many projections for the first six months of open enrollment, health care experts say the federal law has worked in California pretty much as it was meant to -- despite startup hassles such as a glitchy website and hourlong waits to talk to a human being on the phone.

"What California has done is kind of proof that the concept can work," said Larry Levitt, a senior vice president at the Menlo Park-based Kaiser Family Foundation. But, he cautioned, "it's not a guarantee that it will work everywhere.''

Much of the reason it has been relatively smooth sailing in California, Levitt and other health care experts note, has to do with the groundwork laid years ago by former Gov. Arnold Schwarzenegger, who signed legislation creating provisions that allowed the state to get a big head start on the Affordable Care Act, commonly called Obamacare. It also didn't hurt that the blue state received $1 billion in federal grants to help it build its own insurance exchange and pay for outreach, marketing and consumer assistance.

Advertisement

But there are still lingering questions about the long-term viability of Obamacare, California style.

Indeed, the things many California health consumers want to know -- from whether insurance premiums will go up next year to whether they should expect long waits for doctors' appointments or packed waiting rooms at hospitals -- won't be known for a while, Levitt and other experts say.

In part, it will be hard to characterize the exact "risk pool" the new exchange has created until the final enrollment numbers are counted and analyzed after April 15 -- the extended deadline for those who start but cannot finish their applications by Monday.

Even assessing the health status of many new enrollees -- Who is sick? Who is healthy? -- may be next to impossible unless they have sought medical care under their new policy and generated a medical record by May 1, when insurers need to submit their proposed 2015 rates to the exchange.

Not knowing that critical information makes this "a tricky year for trying to predict what prices are going to be for next year,'' said Charles Bacchi, executive vice president of the California Association of Health Plans, an industry group for the health insurance companies in the state. He said that premium prices for next year won't be available until this summer.

But he rejected recent national news reports that predicted "skyrocketing'' premium hikes next year. "You can't take those global comments and say, 'This is what will happen in California,' '' Bacchi said.

Levitt said the health plans will be carefully watching which prescription drugs -- from cancer drugs to insulin for diabetics -- are being used by the new enrollees. Without seeing the medical records of many of their customers, however, often all the insurers will have to go on are a few data points: the number of enrollees, as well as their age, gender, race.

But that's better than last year, said Christian Stenrud, a spokesman for Kaiser Permanente, one of the four largest insurers selling health plans on Covered California, the state's exchange.

Back then, actuaries could only offer insurance companies their best estimates about how many of the state's 6 million legal residents who were uninsured might actually sign up for a plan.

"Now, we know that people signed up, there was interest, and we have gone over 1 million people in California,'' Stenrud said. "That is certainly a group of people you can work with from a risk pool perspective.''

While Kaiser's medical centers and call centers have seen an increase in appointments and patient visits over the past few months, he said, it's been primarily because of the seasonal flu, which was particularly severe this year.

Other industry officials have said that one reason it's hard to gauge the size of the Obamacare pool is that many of those who signed up for the new plans already had insurance -- including the hundreds of thousands of Californians whose policies were canceled because they didn't comply with the health law.

Dr. David Quincy, regional medical director at Palo Alto Medical Foundation, agreed that it's still too soon to say whether the new law is bringing in a lot more business.

"I would have to say no," he said. —Certainly not a big wave.''

Levitt said that while some formerly uninsured consumers with pent-up health care demands no doubt made doctor's appointments, "it's not like people were waiting to get their insurance and immediately ran to their cars to go to the hospital."

Covered California has also had problems enrolling Latinos and enough people between the ages of 18 and 34. Because both groups tend to be younger and healthier, experts say, their numbers are being carefully watched since they could balance out the numbers of older, sicker enrollees.

Should rates spike, the steeper prices could further dissuade many people who already have opted out of insurance because of the cost -- despite the fact that going without insurance under the law means they face a penalty of $95 or 1 percent of their income, whichever is higher.

"Maintaining a reasonable rate of premium growth will be important to making sure that individuals can continue to enroll in Covered California,'' said Laurel Lucia, a policy analyst at UC Berkeley's Labor Center.

Lucia said the center's modeling -- done in conjunction with health policy experts at UCLA -- showed it would take between three and five years before enrollment in California health plans levels off.

Peter Lee, executive director of Covered California, agreed.

"We are still not at the end of the game,'' he said. "In many ways, it's still the first quarter, even though many are seeking to be Monday morning quarterbacks before the game is half over."